The arrival of summer provokes interest in buying a second living space In Spain, especially among foreign citizens. After the coronavirus pandemic paralyzed and thus hindered travel outside the country of residence, the second upward trend in home buying has consolidated so far this year, which we can already observe at the end of 2021.
The Spanish Mortgage Association (AHE) prepares a report on the country’s mortgage portfolio each term and the last one is published in December 2021, 86.7% of the balance mortgage our country is within the scope of financing, the purpose of which is the purchase of habitual residences. and “second homes with a significantly lower share, with operations representing 9.8%”, the second figure representing a slightly more substantial increase of 0.7 percentage points compared to the situation at the end of 2020.
Similar data were collected in the ‘Photocasa Research’ study, which analyzes the profile of second home buyers in our country. The real estate portal therefore states that “Spaniards looking for a second home to buy in 2021 represent 11% of the total purchase demand,” representing an increase of almost two percentage points compared to 2020. . However, we see that The proportion of foreigners buying houses in Spain continued to be much higher, reaching 89%.
Mortgages for second homes, more stringent
According to data collected by mortgage consultant and comparator iAhorro, 75.10% of users who signed a mortgage between January and June 2022 were looking for a loan to buy their first home.that is, they were people who had no property until that time. Therefore, 24.90% of the remainder signed a mortgage for a second home.
Of course, whether you are a foreigner or not, the conditions for a bank to give you a mortgage for a first or second home are different, more demanding when it comes to unconventional housing. In general, if the home is a first residence, financial institutions will usually provide financing at 80% of the home price (or even higher if there are warranties or if the client has a good profile), but if it is a “second home” the financing percentage is usually of the property’s purchase value or appraisal. around 60% of its value”, explains Simone Colombelli, Mortgage manager at iAhorro.
Also, if you’re a foreigner, “the bank may increase the interest on the operation, demand shorter payback periods, or even provide financing below 60%,” adds Colombelli.
What should a foreign citizen do to buy a house in Spain?
Generally, most banks Those residing in European countries or the United States will see better, but above all to those who hold Spanish citizenship despite living abroad. Secondly, it will be able to prefer better conditions in almost every respect. Conversely, if the citizen wishing to buy a house in Spain comes from outside the EU, the terms offered will depend on existing agreements between the place in question and Spain, as the financial institution is exposed to a greater risk of money laundering. .
The basic procedure for a foreigner to apply for a mortgage in Spain is to obtain a NIE or a Foreign Identification Number, which is the same, proving that they are legally in Spanish territory. In addition, all the documents they submit must be translated and a credit risk report including the employment contract and payroll must be submitted. tax return and working life. Banks may also require the opening of a bank account in Spain to issue a mortgage.
They continue to bet on the Canary Islands, the Balearic Islands and the Levante.
“There are many foreigners returning to invest in housing in Spain, especially in the Balearic and Canary Islands and the Levante peninsula.”, an iAhorro spokesperson details. Most of them come from the UK, Germany and France, as confirmed by the real estate registry statistics released by the Spanish Registries to analyze the situation in the first quarter of 2022.
But Simone Colombelli explains that there are changes in these months: “Before the Russian invasion of Ukraine began, there were a lot of Russian citizens requesting housing in Spain, but now, with the Dutch and Russian vetoing of all of Europe, housing in Spain is demanding.” There were many Russian nationals who passed through this country in percentage, among others”.
Concerning the communities with the most home purchases by foreigners, Spanish Registrars report that these are the Balearic Islands (35.37% of the total), the Canary Islands (26.87%), the Valencian Community (25.45%) and the Territory. Murcia (19.42%). However, in the first quarter of the year, investments recovered most dramatically in Andalusia, up two percentage points (until intensifying 15.14% of purchases).